Hybrid sales plunging with gas prices

Sales of hybrid vehicles fell 50 percent last month, an even worse performance than the overall market, which was off a miserable 37 percent. Analysts attribute the lack of interest in hybrids to their higher cost, combined with a four-year-low in gasoline prices. In other words, buyers are rational and see no reason to pay more money for a few extra miles per gallon when gas is only about $1.75 a gallon.

And the cost-benefit ratio for hybrids could get worse in coming months. A severe global economic slowdown, which is likely to last through much of next year, has some predicting that gasoline could fall below $1 a gallon.

Declining fuel prices present a potentially costly dilemma for Detroit's near-bankrupt automakers. House Speaker Nancy Pelosi and others in Congress are demanding that the Detroit Three automakers build more fuel-efficient vehicles, including hybrids, regardless of the price of gasoline.

Pelosi had been opposed to letting the automakers use $25 billion in retooling money for emergency bridge loans and changed her mind only after becoming convinced that the automakers wouldn't last long enough to retool without emergency loans.

The economics of converting production to hybrids becomes a lot more questionable with lower gas prices. Congress could show leadership by raising gasoline taxes to show that it's serious about promoting alternative energy sources. But that's way too much to ask for a body that would rather shift the burden of achieving energy efficiency on others, especially the domestic automakers that many in Congress despise.